Cliff Taylor: How to plan for another year of Covid-19 uncertainty

In the first few months of the pandemic I remember reading, with some horror, a learned expert forecasting that it might all be fizzling out by autumn 2021. It couldn’t possibly last that long, could it? Little did we know. And now as we head into 2022, there are still many divergent views from experts on how this will play out.

But one thing is clear: there is now a premium on flexibility and on our ability to respond quickly. With anti-viral drugs on the horizon and the likely peak of the Omicron wave not too far away, we can hope for a better 2022, but surely best now to plan for Covid-19 being with us in some form, rather than setting short-time planning horizons “to get us through” until some imaginary end point.

Speed of response, we have learned, counts for a lot. The vaccination programme, one of the success stories of the pandemic, will, we are told, be ready in future to ramp up and down as needed. This will involve some cost – but being able to get it up and running again two or three weeks more quickly next time will more than repay this. Even if it turns out not to be needed again on an emergency basis, we can still look at it as a kind of vital national insurance policy. If it is needed, we can see from the pace at which Omicron has spread that speed is vital. And anyhow, some kind of ongoing Covid vaccination programme looks likely to be needed.

Even more complexity surrounds the future of the health service. The need for more ICU beds is a given – as this involves investment in equipment, space and staffing, it will take time. But designing ongoing flexibility into the system to cope with Covid-19 also involves complications and operational costs. But again, it seems wise to start thinking of this now, rather than assuming there is some kind of early end point to the pandemic.

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Flex appeal

Flexibility is also vital in wider society and the economy. Like the vaccination programme, the introduction of business and unemployment supports has been one of the policy successes of the pandemic. Winding these down from their current emergency levels will be a very tricky task, and further extensions into spring look likely.

But thought is needed now as to how this is handled in the longer term. In terms of supports to business, there is a difficult balance between supporting so-called “zombie firms” – those that now have no future as consumer habits change – and pulling the plug too quickly on supports and driving potentially viable businesses to the wall.

Given the successive hits over the past two years, and the hard blow from Omicron, businesses deserve the benefit of the doubt in terms of supports for a bit longer. Wage subsidies, in particular, can retain the link between companies and their employees. But at some stage, general supports will have to be pulled back. It’s time to consider what happens then.

Some sectors will require ongoing support to get back on their feet – the arts would be one example, and travel and tourism another – both vital national assets albeit with futures that may look different. And do we need some kind of semi-automatic programme to help companies hit by future closures if new waves hit in future?

Government officials would hate such commitments, of course, but businesses deserve some level of certainty if they are to invest in their own futures. In this context, saying to businesses “ We will look after you” in future, even if the general support programmes are by then run down, does not really cut it. We should, of course, revisit all the tactics available to keep businesses open – all the much-discussed issues about ventilation, antigen testing, mask-wearing and so on are still relevant.

But let’s not pretend, either, that in the wake of the kind of sudden threat that Omicron has brought there would have been any way to avoid restrictions. The public finances aspect of this may get tighter next year, depending on how inflation and the long-term interest rates move. Again, better to plan.

Tax hike

The pandemic has also put an extension of social supports on the table. Again, it is about supporting people when difficulties hit. Minister for Social Protection Heather Humphreys has again floated the idea of linking unemployment benefit to previous pay for a period after a person becomes unemployed. Better sick pay supports are due to be introduced next year, and improved social supports in other areas are also on the table. A Government-appointed commission on tax and welfare is due to report on all this in the summer. Higher PRSI payment from employers and employees to pay for this – and for the pensions of an ageing population –are on the cards.

Again supports such as better sick pay and improved unemployment benefits are part of building flexibility into the economy and society. Productivity has long been seen as the vital ingredient in economic development, but as the pandemic drags on, flexibility is increasingly important too.

This isn't a forecast of how the pandemic will pan out. We know a lot more than we did a year ago, but we enter the new year still – as author Adam Tooze put it in his book Shutdown – struggling to decide how to decide.Such is the pace of events that in terms of Omicron we should know more in a few weeks. But in terms of the wider pandemic, if even the experts can't tell us what happens next, then we need to adjust our frame of reference and plan to build in the vital flexibility on a longer-term basis in case we need them.

Best to plan for this uncertainty continuing, while still hoping that this will be the year when we finally start to feel some firmer ground underneath our feet.